The Australian Securities and Investments Commission (ASIC) has issued updated regulatory guidance for businesses involved with ICOs and crypto assets.
Thursday, the guidance details the legal obligations for cryptocurrency firms under the country’s Corporations Act, the ASIC Act and other laws.
“These regulatory requirements are in place to maintain the integrity of Australia’s financial market and ensure consumer protection,” the regulator said.
ICOs and crypto assets in many cases are financial products or involve financial products that are regulated under the Corporations Act, according to ASIC. Therefore, if a firm is issuing a token that falls within the definition of a financial product (such as an interest in a managed investment scheme or a security), laws will apply, including the requirement to hold an Australian financial services (AFS) license.
Laws also cover those giving advice, dealing, or providing other intermediary services for crypto-based financial products.
Cryptocurrency wallet and custody service providers, on the other hand, need to ensure they hold the appropriate custodial and depository authorizations. Cryptocurrency miners, if assisting the clearing and settlement of tokens that are financial products, are also bound by Australian laws.
Cryptocurrency exchanges and trading platforms also need to comply with applicable rules, including holding an Australian market license, while cryptocurrency payment and merchant service providers are required to apply for an AFS license if they are providing “non-cash payment facility," as well as complying with a number of laws.
John Price, ASIC commissioner, said:
For ICOs and crypto assets that are not financial products, promoters must ensure that they do not engage in misleading or deceptive conduct or statements, ASIC said.
ASIC first issued regulatory guidance for ICOs in 2017. At the time, rules were mainly focused on Australian consumer law and the country’s Corporations Act.
Australian flag image via Shutterstock
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